Moola Market faces hack, receives major funds back after negotiation

October has been a booming month for hackers as continuous attacks on DeFi protocols and NFT projects have worried the developers. On October 18, CELO Blockchain-based decently large crypto lending platform Moola Market was taken advantage of by manipulating the price of its native token, MOO, which has minimal liquidity. 

We are actively investigating an incident on @Moola_Market. All activity on Moola has been paused. Please do not trade mTokens.

To the exploiter, we have contacted law enforcement and taken steps to make it difficult to liquidate the funds. We are willing to negotiate a…

— Moola Market 🐮 (@Moola_Market) October 18, 2022

The attack resembled the recent Mango Markets incident, as the hacker used the platform’s native token with limited liquidity to conduct a series of strange trades that, while not strictly illegal, nonetheless equated to platform abuse.

Due to MOO’s extremely low liquidity, the blockchain perceived repeated MOO purchases as a sudden increase in interest in the token, which caused the price to soar by an astounding 6,400%. 

Moola team and hacker quickly came to an understanding

Moola developers promptly contacted the attacker via Twitter after becoming aware of the trades and threatened legal action if the attacker’s funds were not refunded within 24 hours. But according to a tweet from the platform, the two parties appear to have quickly come to an understanding: 

“Following today’s incident, 93.1% of funds have been returned to the Moola governance multi-sig. We have continued to pause all activity on Moola, and will follow up with the community about next steps, and to safely restart operations of the Moola protocol.”

October has turned out to be the worst month in the history of DeFi attacks as pointed out by blockchain analysis firm, Chainalysis. 2022 is on track to set a record for the worst year in the crypto industry while October seems to be the worst month in terms of money lost to attacks. 

According to a previous report from TheCoinRise, hackers have profited by more than $3 billion this year, excluding the recent attacks on Mango Markets, Moola Markets, BitBTC, and a few others. Notably, a few hours back, the privacy token BitBTC also was found to be under attack, as we reported.